Intel, that industry bellwether, reported its fourth quarter and the results were no worse than it warned they'd be when it reduced its expectations for the second time.

Unfortunately it doesn't appear there'll be any relief this quarter.

Uncertainty runs so deep that Intel is leery about issuing formal guidance figuring "actual results could differ materially from expectations."

It did however say that for internal planning purposes it was figuring on revenue "in the vicinity" of $7 billion, which is about $300 million lower that Wall Street has been modeling and down about 14.6% sequentially.

Perhaps more importantly it thinks its all-important Q1 gross margin will only work out to somewhere in the low 40s "due to higher underutilization charges and 32nm start-up costs."

It explained that "gross margin is subject to changes in demand levels and pricing that could impact inventory write-offs, mix and unit costs, and potentially create several additional points of margin variability."

If Q1 is going to be stinky then the bottom could drop out of Q2, which is historically weaker at Intel than Q1, as the recession cycles through the emerging markets that Intel was counting on for growth.

Intel didn't address Q2 specifically - other than to call it the "trough" and conjecture that it may be able to start to reload the factories then to restore some level of inventory in anticipation of some kind of normalization in the second half. It all depends on demand.

Anyway, looking back to Q4 for the moment, Intel said it earned $234 million, or four cents a share, down a nasty 90% on revenue down 23% year-over-year to $8.2 billion. It took the expected billion-dollar charge on its depreciated Clearwire WiMax investment where it spent $1.6 billion and had an operating income of $1.5 billion.

Originally it had forecast revenues of $10.1 billion-$10.9 billion then went to $8.7 billion-$9.3 billion and finally to $8.2 billion last week.

In a prepared statement, CEO Paul Otellini said, "The economy and the industry are in the process of resetting to a new baseline from which growth will resume....Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward. Our new technologies and new products will help us ignite market growth and thrive when the economy recovers."

Intel described microprocessor and chipset units as "significantly lower" in Q4 compared to Q3 and said that revenue from the Atom chip underlying the potentially cannibalistic netbooks Intel has put in play was up 50% to $300 million. Total MPU ASPs were flat unless you subtract Atom. Then ASPs were higher.

Otellini denied during a conference call that Atom was a little cannibal and that a vast amount of the data Intel has collected indicates it's "incremental." He said the ASPs indicated Intel was "getting good value for [its] products."

He also denied that any rumored or planned price cuts were "reactive," but simply connected with the introduction of new products. Intel built some inventory in Q4 that will impact production this quarter. It may not be completely worked through this quarter, Otellini said.